Friday, August 02, 2013

Merkel, unified Germany and the future of Europe

British historian Timothy Garton Ash, who is one of my favorite historians, has done an article on German Chancellor Angela "Frau Fritz" Merkel that makes some problematic arguments, The New German QuestionNew York Review of Books 08/15/2013 issue (accessed 08/01/2013).

He gives an admiring picture of what Dirk Kurbjuweit has called "the second Biedermeier" of the Merkel era:

Twenty-three years after unification, the enlarged Federal Republic of Germany is about as solid a bourgeois liberal democracy as you can find on earth. It has not only absorbed the huge costs of unification but also, since 2003, made impressive economic reforms, lowering labor costs by consensus and hence restoring its global competitiveness.

This land is civilized, free, prosperous, law-abiding, moderate, and cautious. Its many virtues might be summarized as "the banality of the good." Asked by the tabloid BILDZeitung what feelings Germany awakes in her, Angela Merkel once famously replied, "I think of well-sealed windows! No other country can make such well-sealed and nice windows [dichte und schöne Fenster]." Yet the place is not altogether so banal. Opening the well-sealed windows of my hotel room in Berlin, I look across Unter den Linden to the illuminated, translucent dome of the Reichstag building, at the heart of what is now, after London, Europe’s most exciting city.

He qualifies his praise a bit on the following items:

Its economy is brilliant at making things that people in countries like China want to buy — cars, machine tools, chemicals—but weaker in services. German companies are outstanding at incremental technological improvements but less good at what is called "disruptive innovation," of the kind you find in Silicon Valley.

And he fairly enthusiastically agrees with the stock neoliberal of one of Merkel's very good decisions: "Having made an irrational, short-sighted political decision to abandon its own nuclear
power program, following the Fukushima disaster in Japan, and relying heavily on coal and
gas, Germany's industrial energy costs are some 40 percent above those in France." (emphasis in original)

Garton Ash comes up with a nice turn of phrase, "sufficient unto the day are the German questions thereof." But he's using it to discount the possibility of serious political disruptions in Germany if the economy takes a bad turn, which it will when and if the euro collapses, though the "if" is looking increasingly perfunctory. Unless the SPD can raise itself out of its own neoliberal dazed state, it could find itself sidelined for good in German politics.

In the stronger part of his article, Garton Ash takes us back to the unification period of 1989-90 and the following years to show how decisions and assumptions of those years shaped the decision-making climate for the euro crisis. This official report on a statement by Merkel's one-time mentor Helmut Kohl in 1989 shows how different his perspective was from the narrow nationalistic one his former protege exhibits today:

He [Kohl] asked himself what more he could do than to contribute to the creation of European monetary and economic union. He had taken this decision [to commit to the monetary union] against German interests. For example, the president of the Bundesbank was against the current development. But the step was politically important, for Germany needed friends. No distrust should be allowed to arise in Europe against us. [my emphasis]

And Garton Ash defines a key element of the political problem in Germany right now. The political elite has to some extent pursued the "European project" above the heads of the public, and has never offered a clear popular narrative about the advantages to Germany of the euro:

In the first decade of the euro's existence, they got used to it, but they never learned to love it. Hardly anyone pointed out to them that Germany was the biggest beneficiary of the single currency, since it created excellent conditions for the country's exports, both into and beyond Europe. According to one estimate, Germany's cumulative trade surplus with the rest of the EU, from the introduction of the euro in 1999 to 2011, was more than $1 trillion. [my emphasis]

And he describes to what state Merkel's muddling-through style has brought Europe:

The chancellor’s pragmatic, low-key, step-by-step approach partly reflects her personal style. But one reason her popularity has held up so well in Germany throughout these years of crisis is that her manifest reluctance to do more than the seemingly unavoidable at every stage of the eurozone crisis has both mirrored and defined the reluctance of a nation. The one really bold, decisive action in the eurozone crisis so far was taken not by Germany but by the Italian president of the European Central Bank, Mario Draghi, when he said in July 2012 that the bank would do “whatever it takes” to preserve the euro. As a result, the eurozone has survived but is not yet prospering—especially not in the debtor countries of the south. In Spain, for example, youth unemployment exceeds 50 percent.

Now, however, we are approaching a moment of truth in the whole European Union. Across the continent, north and south, there has been a dramatic decline in trust in that Union, and the emergence of protest parties. Between the German parliamentary elections on September 22, 2013, and the elections to the European Parliament that begin on May 22, 2014, there will be just eight months to convince these growing legions of skeptical Europeans that Europe’s leaders, established parties, and institutions know a way out of the darkness. Otherwise, we shall get a European Parliament that is both wild and blocked. The anger in some southern European countries could also boil over at any point, unless their peoples see light at the end of what many regard as a German-imposed tunnel.

The German foreign minister, Guido Westerwelle, rightly observes that this is a formative period in three respects: for Europe’s credibility with its own citizens, for Europe's standing in the world, and for the way Europe and the world view Germany. By sheer chance, this historical crux coincides with the hundredth anniversary of the outbreak of World War I in 1914.

The Second Biedermeier is starting to look more like the Second Sarajevo, in terms of decision-making failure, though with less violent consequences.

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Johann Gottfried von Herder (1744–1803)

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